Winners from Beijing's latest move

Mid-sized banks, less privileged borrowers and savers will benefit most from the introduction of negotiable certificates of deposit, according to economists.

The People’s Bank of China is to allow Chinese commercial banks to issue negotiable certificates of deposit on the interbank market, a breakthrough in the process of the country’s liberalising its interest rate.

China’s central bank currently sets a benchmark rate for deposits and only allows banks to offer interest rates of up to 1.1 times the benchmark level. The issue of NCDs, a savings certificate entitling the bearer to receive interest, will let...